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Why Newly Minted IPO At Home Doesn't Have An Online Business Yet

At Home Group debuted on the New York Stock Exchange Thursday. Its CEO Lee Bird takes TheStreet's Brian Sozzi behind the scenes of its home decor business.

Shares of home goods retailer At Home (HOME) were met with a muted reaction by Wall Street during its debut Thursday on the New York Stock Exchange. But, the company has all the makings of being a legitimate challenger to the much larger home goods outfits such Bed, Bath & Beyond (BBBY) and TJ Maxx' (TJX) Home Goods division due to its focus on low prices and expansive selection of items. At Home's store typically average 120,000 square feet and are generally no frills, stocked with trendy -- but affordable -- pillows, bedding and various furniture. The company employs a mostly private label business model, giving its stores a selection of merchandise that competitors such as Bed, Bath & Beyond, Target (TGT) and Amazon (AMZN) lack. Furthermore, the stores are self-serve, so that means low employee costs during a period of rising wages in the retail sector. An added bonus: the company feasts on the cheap real estate being left for dead by department stores like Sears (SHLD) and J.C. Penney (JCP) . At Home has proven that it's business model could be lucrative if scaled to its plan of 600 stores in the U.S. over time. Operating profits bulged to $46 million last year from $18.9 million a year ago. Same-store sales rose an impressive 8.3% a year ago, aided by the U.S. housing recovery. The business has had a good performance this year, too. "We have had nine consecutive quarters of same-store sales growth through the first quarter, we keep seeing growth despite the choppiness of the market," At Home Group President and CEO Lee Bird told TheStreet in an interview. Interestingly, At Home's success so far comes despite it not having an online business -- the company only allows people to browse for about 30,000 items online and then tells them where to pick them up. "Our customers like to see and feel the product," said Bird of the strategy, adding, "it doesn't feel like we need to be online as long as our customer's needs are being met." TheStreet's Brian Sozzi reports from New York City. 

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